Responsibilities And Strategies Of HSBC

Responsibilities And Strategies Of HSBCThis report mainly foc delectations on an organizations stakeholders, market conditions and how firms adapt to different channel circumstances. An organization needs to severalize mission situatement, values and tell apart objectives and how these things influence of stakeholders. Environment of business is valuable to organization. The caller- out(a) should lowstand their responsibilities and strategies. They should identify the war-ridden strategies implemented to upgrade competitive service oer competitors.An organization should identify the, what respects atomic number 18 perfect disceptation and what respect are unlike perfect competition. groundingHistoryHSBC, in 1882, appointed Delmege Reid and Co. the predecessor of the present Delmege Forsyth and Co. Ltd. as its agency in Colombo. In 1884 the islands economy suffered a severe setback when coffee plantations throughout the country were al close totally destroyed by disease. As a result of this and the folding up of the once great Orient Bank, HSBC saw an opening for a corporate bank like itself.In the other(a) 1920s the bank purchased and began construction on land adjoining the Bank of Madras. HSBC moved into its new home at 24, Sir Baron Jayatilaka Mawatha (which it occupies even today), an impressive street corner in Colombos architectural and business landscape.Through the good times and the bad that followed, HSBC supported Sri Lankan businesses. The Chetty Crisis which began in 1927 was so termed be clear m all Chattier business people were forced to default their loans. While the impression was that foreign banks discriminated against Sri Lankans and did not advance monies freely to topical anesthetic businesses, 50 per cent of HSBCs bring during this time was to Indians and Sri Lankans.With the stationing of the British Air Force in parts of Sri Lanka during the Second World War, HSBC became a hub of activity. During this time and until 1 956, the Government of Ceylon kept a very substantial revenue account with HSBC.Today, HSBC has become peerless of the most utile banks in the country.Technological InnovationsAs an progressive bank, HSBC has led the Sri Lankan banking exertion into the electronic age with the installation of the nations first online automated teller machine (ATM). HSBC was as well the first bank to computerize its operations and to establish an Internet Payment Portal. Furthermore, the introduction of phone banking, personal internet banking and the sort outs world(prenominal) electronic banking platforms, such(prenominal) as Hexagon and HSBC net, has greatly enhanced the service they deliver to their guests.Listed below are many firsts from HSBCInstallation of Automated Teller Machines (ATMs) in Sri Lanka in 1986Computerized banking operations in Sri Lankaelectronic DC Advising, a quick and easy way for customers to receive their export Documentary Credit and amendments via e-mail or fax. entre of electronic banking via Hexagon in 1994Introduction of self-service banking through Day and Night Automated Banking Centers in 2004Launch of state-of-the-art banking, internet based electronic banking platform HSBC net in 2005Introduction of Security Tokens for added online protection in 2005Easy Pay machines to facilitate cash and cheque deposits in 2006Introduction of toll free telephone banking in 20071.1 bang StatementWe live the brand values to passionately deliver world-class customer mystifys through a dynamic, motivated and professional team, which demonstrates mutual respect whilst providing innovative solutions and continuously outperforming the market to the most sought-after financial service tolerater admired by all.1.1.1Values and key objectivesTo exceed customer expectations in service quality.To be a pioneer in the implementation of technologies those create distinction for its customers, employees and shareholders.To keep its reliability at the utmost lev el with the contri aloneion of its strong capital twist and liquid assets.To make a positive contribution to the community.To respect meritocracy during hiring processes, improving knowledge and skills of its employees, creating the mostly favourred work environment.Through its core business principles, HSBC functions to make it objectives. HSBC.com lists these as outstanding customer service effective and efficient operations strong capital and liquidity prudent lending policy and strict expenditure discipline. HSBC also stresses that commitment by employees wait ons to create long-term customer relationships, a keystone of the banks profitability model. HSBC.com states this is accomplished through attention to integrity, ethics and managerial oversight.The HSBC Group is committed to fin Core Business Principles Outstanding customer service Effective and efficient operations Strong capital and liquidity Conservative lending policy Strict expense disciplineHSBCs commitment to its values has allowed the familiarity to accomplish many of its goals for expansion and profitability, as well as commitment to local coronation and excellent customer service. HSBC is designed to be both global and local. Bankers Almanac ranked HSBC as the 14th largest bank in the world, in scathe of assets, in 2009. In addition, HSBC is carrying its objectives forward into the Information Age planetary Finance Magazine rated HSBC as one of the worlds beaver Internet banks for 2009 (Anonymous, 2010)1.1.2 Products1.2.0 Stakeholders AnalysisStakeholder analysis is undeniable for the company to identify its most important stakeholder and understand about group around the organization. It go away also tell the company which group has the greatest clash to the company.HSBC Sri Lanka has stakeholders such as Customers, shareholders and employees. All stakeholders are very important to the HSBC.Stakeholders of the organization and their ObjectivesStakeholderObjectivesManagers/Dir ectorsTo retain control.To direct major decision making.EmployeesGood working environment.Motivation and satisf transaction.To firm their jobs.CustomersTo receive good customer service.To obtain good value for money from the goods and services.ShareholdersTo receive dividends.To share the profitability of the business.To share the share monetary value.SuppliersTo continue to sell productively to the business.To be paid skillfuly for goods supplied.CompetitorsTo compete by all lawful means.To differentiate products from other businesses.Government/Legal InstitutionsTo receive tax revenue from profitable firms.To assist the business in accordance with the local and national policy.1.2.1 Extent to which HSBC achieves the objectives of its stakeholders.HSBC is a fair trading company and is very filled about the interests of the stakeholders. The objectives and the targets of the company are set in order to satisfy the stakeholders. HSBC listens to the opinions and expectations of th e stakeholders including government, shareholders, and customers into business decision making processes. For example, in 2001, based on concerns around marketing to children and existing cognizance on the age when children identify and understand advertising motives, they prevented from advertising to children under eight years of age where they are the majority of the audience. Cadbury plc has given higher concern to the following stakeholders.Strategies or Ways Implemented to achieve Responsibilities and Stakeholder ObjectivesAn organization is responsible to its stakeholders and is responsible to achieve their objectives. Organizational responsibilities and stakeholder objectives is a combined relationship. Achieving the objectives willing make the company successful in fulfilling their responsibilities.Responsibilities of OrganizationsEmployeesCustomersShareholdersEqualityTo be safeRight to chooseSafetyTo keep informedRight to access informationEmployeesHSBC recruit the best people not considering of age, gender, disability or ethnicity. They aim to attract employees who will be committed to a long-term career with the Group, offering a competitive reward package and career development opportunities within a strong organization with values.HSBC encourages employees to take part in local volunteering programs. HSBC key community investment initiatives incorporate opportunities for employees to get involved by giving their time and sharing their expertise.HSBC annual Global People Survey acts as a measurement for employee date and satisfaction. With a 91% response rate in 2009, their employees take the survey seriously. In 2009, 77% of employees said they felt confident that HSBC is moving in the right-hand(a) direction and 83% said that they were proud to work for HSBC.ShareholdersShareholders are the people who invested money in the company. HSBC is a public limited company and can pick out shares in the stock exchange.HSBC engage with their sharehol ders on an ongoing basis, holding regular meetings with fund managers. In 2009 HSBC ran a program of over 900 meetings with institutional investors, including those with a special(prenominal) interest in the Sustainable and Responsible Investment (SRI) sector.CustomerHSBC aims to offer customers around the world a consistently high quality service and experience using the benefits of their scale, geograp0hic reach and strong brand.HSBC aim is always to treat their customers fairly and with respect and they manage their deposits responsibly. Their lending criteria are strict, taking into consideration their customers views they carry out market surveys and communicate directly with their customers on a regular basis.When customers have difficulties making loan or mortgage repayments, they try to do their best to help them. Sometimes this means restructuring or refinancing their debts, and offering counseling on an individual basis.When access to credit became restricted for commerci al customers in 2008. HSBC created a new US$ 5billion global working capital fund for small and medium-sized businesses. This was over and above what HSBC would normally expect to lend.1.4 Competitive strategies implemented to gain competitive advantage over competitors.TechnologyFirst to introduce ATM in Sri LankaSelf service paying machineInternet BankingTelephone BankingCustomer ConvenienceInnovationGlobal research teams/new systems- cost effectiveStrong global presenceBest practices shared and implemented in other areasProductsGlobal presenceProducts unique- global features/accepted world wide1.5 Role of the Competition Commission and regulatory bodies.Competition CommissionThe Competition Commission is a public body which obtain on competition issues referred to it by the secretary of state and the Director General. The Competition Commission replaces the MMC, which was dissolved by the Competition Act 1998 and whose functions were transferred to the CC. The Director General whitethorn require the CC to investigate and report on whether the actions of a telecommunications operator licensed under the T Act operate, or may be evaluate to operate, against the public interest and, if so, whether this could be remedied or prevented by modifications of the conditions of its license. The CC would also be responsible for considering any competition concerns arising from mergers and acquisitions of or by winners of WT Act Licenses, if the secretarial assistant of state, acting on the advice of the Director General of Fair Trading refers that merger or acquisition to the CC for investigation.Regulatory BodiesThe discussion section of Trade and industry (DTI)The Department of Trade Industry is the Government Department responsible for the development of telecommunication policy and the promotion of the telecommunications industry. The Communication and Information Industries directorate of the Department of Trade and Industry deals with national and internatio nal policy and regulatory issues, including those tingeing the mobile telecommunications market. The department of trade and Industry is responsible for licensing operators to run telecommunication system under the T Act.The Rediocommications sanction (RA)The Rediocommunications Agency is an Executive Agency of the Department of Trade and Industry with responsibility for management of the radio spectrum throughout the UK. The main functions of the Radio communications Agency are formulating policy on the planning and management of the radio spectrum within the UK, co-ordination of UK views and participation in international negotiations on the use of radio, authorizing use of radio by licensing or exemption, formulating technical and operating standards for radio, enforference. The RA is responsible for issuing licenses to use the radio spectrum under the wireless Telegraphy Acts and for monitoring compliance with those licenses and taking enforcement action where necessary.The Of fice of Telecommunications(OFTEL)The Office of Telecommunications was established by the T Act to support the Director General of Telecommunications in the performance of his duties. The Director General and the Secretary of state have a joint duty to exercise their respective functions under the T Act to secure the provision of telecommunication services throughout the UK and, shell to this, to promote the interests of telecommunications users in respect of the prices charged for, the quality and variety of telecommunication services provided and telecommunication apparatus supplied and to maintain and promote effective competition in the telecommunications market. The Director General has a duty to give the Secretary of state advice and information with respect to licensing of telecommunication systems, at the request of the Secretary of State or where the Director General considers it expedient.OFTEL performs the function of the UKs regulatory authority in telecommunications, mo nitors compliance with licenses issued under the T Act and takes enforcement action where necessary. The Director General has extensive powers under the T Act, particularly when enforcing or modifying license conditions. If a condition is breached, he can require the license holder to comply by making an order. This is enforceable by third parties or the Director General through civil action. He can also make determinations for example to set out the foothold for interconnection between ne tworks where the two operators cannot agree between themselves. The Director General can also require operators or other parties to fork up the information essential in order to come to a decision.Task 2(P3)2.0 CompetitionThe effort of two or more parties acting independently to secure the business of a third party by offering the most favorable terms. There are two main methods in which firms compete.Price Competition.Non-price Competition.2.1 Competitive gain and Competitive StrategiesA com petitive advantage is an advantage above competitors gained by offering consumers larger price, each by income of lower prices or by providing larger benefits and service that justifies higher prices.There are two types of competitive advantages found by Michael porter.Cost AdvantageCompetitive AdvantageSimilar Product turn down costDifferentiation AdvantageHigher PriceFor unique Product2.2 Strategies to Gain Competitive AdvantageGaining a competitive advantage can provide a business with a distinct advantage over its competitors. There are two basic approaches to gaining a competitive advantage. These are cost leading and differentiation.These are the strategies that I feel, should be implemented to gain the competitive advantage.Porters five forcesResources based viewGeneric systemPorters Five ForcesThe model of porters five forces is utilize to analyze the value of an industry structure. It identifies five primary competitive forces and enables organizations to adapt the bus iness to take advantage of the opportunities and overcome threats and gain a competitive advantage. (12-manage, 2010)These five forces should be analyzed by the company and develop its market on the forces which are weak. For example if the poser is a low cost producer it will choose powerful buyers and sell them only products that are not vulnerable from substitutes.Also a company is able to achieve a competitive advantage by altering theses forces. For example HSBC can put barriers to new entrants by using unique and capital intensive resources that competitors cannot easily duplicate and also use resources such as patents and trademarks.Competitive RivalryThreats of New introwayBuyer powerThreats of SubsitiutionSupplier powerCompetitive RivelryStrenght of Competition.Similar size competitors.fiscal aptitude of competition.Growth of the Industry.Treat of new entryEconomic of scale.Government Policy.Capital Requirement.Treat of SubstitutionNumber of akin(predicate) products.S ubstitut availability of the market.Buyer PowerFinancial strenght og buyer.Number of competitors.Purchasing volume.Supplier PowerNumber of suppliers.Number of substitute.By using this model the company can see the position of it self in the market. This analysis can be used to adopt a suitable strategy to gain the competitive advantage.Resource-Based ViewThis strategy emphasizes that in order to gain a competitive advantage a firm should possess two main features. That is firms should have superior resources and capabilities exceeding its competitors. If not the competitors can easily copy what the firm was doing and the company would lose all the benefits. (QuickMBA, 2007)Generic StrategiesMichael porter has found three generic strategies into which business operations can be categorized. They are cost leadership, differentiation and commission. Porter emphasizes that high profits or competitive advantage is a result of two features. He states that firm strengths will fall into one of the two headings which are differentiation and cost advantage and the extent these strengths are applied will result in the generic strategies. (QuickMBA, 2007)Generic outline manakinAdvantageCost leadership DifferentiationStrategy StrategyBroadNarrowTargetLow cost Differentiation(Quick MBA, 2007)Cost Leadership StrategyThis generic strategy calls for being the low cost producer in an industry for a given level of quality. By producing the products cheaply than the competitors at a given level of quality the firm can sustain a competitive advantage on cost. This would be very advantageous as when an industry matures and prices decline, firms that can produce cheaply will remain profitable for a longer period. (QuickMBA, 2007)Each generic strategy has its risks, including low cost strategy.Differentiation StrategyThis strategy calls for the development of goods that offers unique attributes that are valued by customers and that customers perceive to be better than or differe nt from products of the competition. This strategy is producing products which contain unique features and attributes that consumer prefer to have and which are better and can be distinguished from the competitors products. The value added by uniqueness of the product may allow the firm to charge a finest price for it. (QuickMBA, 2007)Focus StrategyThis strategy is concentrates on a narrow market or a segment. The firm can target the cost leadership and differentiation strategy on a particular market segment, this will create a focus cost strategy or a focus differentiation strategy. (QuickMBA, 2007)The advantage of a focus strategy is that the firm is able to meet the needs of customers effectively than if a broad market and for that reason customer loyalty outgrowths.3.0 commercialise StructuresMarket structure is the organizational and other characteristics of a market. We focus on those characteristics which affect the nature of competition and pricing but it is important not to place too much emphasis simply on the market share of the existing firms in an industry.Market structures allow us to analyze how much competition there is among firms making a particular product in an industry. There are four main types of market structures with different characteristics in each of them.perfective aspect CompetitionMonopolyMonopolisticOligopolyPerfect competitionPerfect competition is a market structure in which an individual firm cannot affect the price of the product it produces. Each firm in the industry is very small relative to the market as a whole, all the firms sell a homogeneous product and firms are free to enter and exit the industry. Competition policy has the objectives of increasing competition in the economy, or of encouraging firms that are not competitive to behave as if they were, in its role as consumer advocate, the competition authority is often responsible for implementing policy directed at outlawing unethical style by business. Perfect c ompetitive market has seven distinguishing characteristics.Large number of buyers and sellersA homogeneous productPerfect knowledgePerfect mobilityFreedom of entry and exitAbsence of non-price competitionThe firm is a price takerExample of a perfect competitive marketIn the Maharagama Market there are many characteristics of a perfectly competitive market. All type of vegetables, fruits and other small goods are sold in this market. There are many customers advent to this market to buy goods for cheaper price.In the Maharagama market, many stalls that have the same(p) prices for many vegetables and fruits of the same quality. It is not because they have fixed the prices together before trading. In this type of market consumers will compare the prices of different stalls and purchase from the cheaper stalls for a given quality.In perfect competitive market has no barrier to enter to the market.Monopoly CompetitionMonopoly is a single seller supplying the entire output of an industry . The have rationalise that it faces is the entire industry make curve for the good or services it sells. The monopolist sells unique products, and extremely high barriers to entry protect it from competition. A natural monopoly arises because of the existences of economies of scale in which the LRAC curve falls indefinitely as production increases. Without government restrictions, economies of scale allow a single firm to produce at a lower cost than any firm producing a smaller output. Smaller firms leave the industry, new firms fear competing with the monopolist, and the result is that a monopoly emerges naturally.Major elementsOne sellerOne productPrice-makerBarriers to entryMinimal advertising expenditureExample of Monopoly CompetitionIn Sri Lanka monopoly (sole) producer is government. The electricity and water is provided from the government.There are high barriers to entry in to the market. Barriers such as,Limited resources.Cost of production.PatentTherefore any others cannot enter this market. The government sets the price and there are no other producers to manipulate this. They have full control over the market, they are price makers.Monopolistic CompetitionA market structure in which several or many sellers each produce similar, but slightly differentiated products. Each producer can set its price and metre without affecting the marketplace as a whole. Monopolistic competition has characteristics of both competition and monopoly. Similar to competition, it has many firms, and free exit and entry.Example of Monopolistic CompetitionConsider the Soap industry as an example. There are few large producers of soap in Sri Lanka such as Sunlight, Rani, Zinal, Lifebuoy, and Lux etc. There is competition as in perfect competition but products are not the same. These companies have monopoly in the production of its particular product for the reason that no other firm can produce soap carrying the same name.OligopolyAn oligopoly is a market condition in which the production of identical or similar products is concentrated in a few large firms. Oligopolies have characteristics similar to a monopoly.Example of OligopolyConsider the cell phones industry as an example. The Cell Phones industry is dominated by a few large firms such as Apple, Nokia, LG, Samsung, and Motorola etc.In the Gas production of Sri Lanka there are only two large known producers that is the Shell Gas Company and the Laugfs Gas Company. These two companies have the highest share of the market and there is a low level of competition.Less Market Control MoreMany Number of competitors OnePerfect CompetitionMonopolisticOligopolyMonopolyMarket ContinuumThis is Market Continuum. This diagram shows how the structure of the market changes according to the level of the market control and the number of competitors.4.0 Market forcesForces of imply and supply representing the aggregate influence of self-interested buyers and sellers on price and quantity of the goods and se rvices offered in a market. In general, excess-demand causes prices and quantity of supply to rise, and excess supply causes them to fall.Supply augmentPrice increaseDemand IncreaseDemand fallsPrice fallsSupply fallsDemand and SupplyDemand is the amount of a particular economic good or service that a consumer or group of consumers will want to purchase at a given price. The demand curve is usually downward sloping, since consumers will want to buy more as price decreases. Demand for a good or service is resolved by many different factors other than price, such as the price of substitute goods and complementary goods. In extreme cases, demand may be only unrelated to price, or nearly infinite at a given price. Along with supply, demand is one of the two key antigenic determinants of the market price.Supply is the availability of a product or a service in a market. The law of supply states when prices increase the firms would want to supply more. This is because they want to incre ase their revenues. straw man along the CurveChanges in price will result in a movement along the curve with the fact that other factors remain same(predicate) due to the changes in quantity demanded or supply. A fall in the price will result in an extension of demand, quantity demanded will increase. contraction of Demand is where an increase in price causes demand to fall.For an example an increase in the price of Donuts, while other factors remain unchanged will cause an increase in the quantity supplied. Sellers will move from one point to another point in the same curve. When price increased from P1 to P2, quantity supplied willPrice SupplyP(2) BP(1) AQS(1) QS(2) QuantityShift of the CurveThe curve shifts to the right or left as a result of changes in any other non-price determinants due to a change in supply or price.The demand curve shifts to the right as a result of an increase in demand while price remains unchanged. The curve shifts to the left as a result of a decrease i n demand with price remaining unchanged.For an example demand for cool drinks might fall in the winter season therefore demand decreases due to a non price determinant which causes a shift in the demand curve to left from D to D1 while the price remains unchanged.DD1PQD QD1Non- Price Determinants for DemandChanges in consumer incomes.Changes in tastes for consumer goods.Changes in expectations of future prices.Changes in price of Substitutes.Non- Price Determinants for SupplyChanges in production technology.Changes in cost of resources.Changes in number of sellers in the market.Changes in expectation of future prices.4.1 Influences on Firms of Market ForcesDemand and Supply influences to a great extent on price. When demand increases suppliers will supply more and as a result the suppliers will increase the prices in order to obtain higher revenue, however when price keeps increasing demand will start falling.Market forces helps firms to determine the market price where the quantity demanded equals to the quantity supplied. This is known as the equilibrium price.Supply and Demand modelThe point where the supply curve and demand curve meets is the equilibrium price. If the suppliers sell below the equilibrium price then buyers will demand above the supply which creates a shortage in supply. The other could also happen where the suppliers sell at a price higher than the equilibrium price which will lead to a surplus of goods.For an example demand and supply of Rice in Sri Lanka. Rice producers created a shortage in the supply of rice with the purpose of increasing the prices. This was an illegal practice this shortage in supply of rice, lead to an increase in demand to a great extent as this was also an essential product. It affected consumers a lot and the consumers were wide-awake to buy rice at any level of price. This shows that demand and supply can have both negative and positive influences on firms.Changes in quantity demanded a